Nonfarm payrolls increased by 175,000 jobs last month, the fewest in six months, the Labor Department’s Bureau of Labor Statistics, Reuters reported.
MIDF Research (MIDF) Economic Brief today (May 6), said job creation in the US slowed more than expected in Apr-24 as the nonfarm payrolls rose by +175K (Mar-24: +315K), the softest expansion in 6 months and below market expectations of +243K. Private payrolls increased by +167K, the slowest increase in 5 months.
Most of the additional hirings were added in the services sector.
Goods-producing jobs expanded by +14K, the least since Oct-23, although hiring in the manufacturing sector rebounded to +8K after 2 months of contraction.
Private service providers increased payrolls by +153K, the smallest growth in 5 months. Meanwhile, government payrolls rose by +8K, the weakest growth in nearly 1.5 years.
Wage growth also recorded further moderation as hourly earning growth eased to +3.9%yoy (Mar-24: +4.1%yoy), the slowest since Jun-21.
Meanwhile, the unemployment rate increased to 3.9% against market expectations for the rate to remain at 3.8%. In another release, the ISM Services PMI fell to 49.4 in Apr-24 (Mar-24: 51.4), the first contraction since Dec-22 and in contrast to market expectations for an increase to 52.0.
Signs of cooling labour market and softer demand conditions supported market expectations for a possible rate cut by the Fed later this year.
In other words, slowing economy is expected to pose lower inflationary pressures. At this point, MIDF maintains their projection that the Fed will likely cut its policy interest rate in the latter part of 2HCY24.
